CHICAGO — The Illinois Supreme Court agreed Wednesday to an expedited review of the state government's appeal of a lower court ruling that overturned state pension reforms.
Illinois Attorney General Lisa Madigan, whose office is defending the 2013 legislation, requested the "expedited" consideration while unions behind the lawsuits filed at the state court level sought to block the quicker pace for the appeal.
"The Court being fully advised in the premises; it is ordered that the motion for accelerated docket is allowed," read the one-page order posted on the court's website Wednesday.
The state's initial brief is due Jan. 12 with the unions' brief due Feb. 16. In turn, the state's reply is then due Feb. 27 and oral arguments will be scheduled "for the March 2015 term of the court," read the decision.
Sangamon County Circuit Court Judge John Belz last month voided the pension legislation, saying the cuts violated the state constitution's clause that protects pension benefits from impairment or diminishment, agreeing with the arguments laid out by unions and employees and retirees who filed lawsuits challenging Public Act 98-0599. The appeal went directly to the high court.
The state argued an expedited hearing was needed due to the impact on the budgeting process. The unions earlier this week asked the court to adhere to a regular schedule to better provide adequate time to argue the case's points and accused the state of creating a "false sense of urgency."
A spokesman for the union coalition, We Are One, said the court settled on the best option under various options floated for an expedited review.
"We will make our case that the constitutional pension clause is absolute and that the circuit court's ruling should be upheld," said Anders Lindall.
The state, knowing a legal challenge loomed, didn't build any savings on pension contributions from the pension into its fiscal 2015 budget that runs through June 30, so there's no immediate fiscal impact. It's also long been clear that the state high court would have the final word on the reforms approved last December.
The rating agencies are taking a cautious approach. Standard & Poor's wrote in a special bulletin published late Friday that the state's A-minus general obligation rating and negative outlook would hold.
All three rating agencies assign A-minus-level ratings to the state's GOs, the lowest among states, and negative outlooks. The state's $111 billion of unfunded obligations have driven the state's steep credit deterioration in recent years.
In his ruling, Belz rejected the state's defense that it acted within its police and sovereign powers to alter its contract with retirees due to the state's fiscal emergency. Belz said the state did not make the case that such powers were sufficient or the they even existed to ignore the "plain language" of the pension clause protecting annuities. Belz made permanent a temporary injunction banning the state from implementing the changes aimed at trimming $145 billion off state payments over next three decades.